HMM is reportedly attempting to buy back the liquefied natural gas (LNG) shipping unit that South Korea’s flagship carrier divested back in 2014 when it began facing financial troubles.
The LNG shipping unit was sold to South Korean private equity firms IMM Private Equity and IMM Investment for US$375 million and renamed Hyundai LNG Shipping. In mid-2016, HMM came under the control of state policy lender Korea Development Bank after a debt-for-equity swap.
Amid the current LNG shipping boom, IMM now wants to cash out of its investment.
HMM, now with sufficient cash after the Covid-19-fuelled container shipping boom, has apparently expressed interest in acquiring Hyundai LNG, which has long-term shipping contracts with South Korea’s state-controlled LNG importer and terminal operator Korea Gas Corporation.
Following its separation from HMM, Hyundai LNG also diversified into liquefied petroleum gas (LPG) shipping, counting South Korea’s second largest LPG importer E1 Corporation as a customer. Hyundai LNG now owns 16 LNG carriers and six very large gas carriers.
In March, IMM invited tenders to acquire Hyundai LNG and at least 20 interested parties from the US, UK, Greece and Denmark have submitted bids. HMM, which has made known its intention to expand its bulk carrier and oil tanker fleets, is believed to have expressed its interest in taking Hyundai LNG back into its fold early this month.
In July 2022, HMM detailed a five-year strategy involving investing US$11.4 billion to grow its fleet. In addition, KDB and Korea Ocean Business Corporation, now HMM’s largest shareholders, have begun seeking buyers to offload their interest in the company.
South Korean media reports claim that IMM may be pressed to sell back Hyundai LNG to HMM, due to concerns of foreign interests controlling LNG flows to the country.
An HMM spokesperson told Container News that the company had not made a specific decision about acquiring Hyundai LNG.
News of HMM’s intention to re-enter the LNG segment coincides with reports that the company has acquired a medium-range products tanker, Petronia Pacific, from Singapore-based Pacific Carriers, for US$43 million.